MMG is China's preferred developer of overseas mines - CEO

Reuters Staff

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MELBOURNE, Oct 12 (Reuters) - MMG Ltd, the international mining unit of state-owned China Minmetals Corp, has become China’s preferred developer of overseas mining projects after it was selected in a trial, MMG’s chief executive said on Thursday.

China’s government is supporting moves overseas by state-owned industries with a keen focus on commodities in which China is short, Jerry Jiao said.

Beijing is trying to streamline and modernise its bloated and debt-ridden state-owned sector and create conglomerates capable of competing globally.

“Minmetals has been selected as a pilot programme for SOE reform – the only one in the metals sector,” Jiao said.

“This has now positioned MMG as a preferred vehicle for foreign direct investment into international resource investment in ‘China short’ commodities,” he said, speaking at a Melbourne Mining Club lunch.

Minmetals’ selection for the trial was partly due to its successful development of the Las Bambas copper mine in Peru and its zinc mine, Dugald River, in northern Australia, Jiao said, a “demonstration that China can deliver and operate world scale international mining projects – and deliver value.”

MMG expects to produce 65,000-72,000 tonnes of zinc and 560,000-615,000 tonnes of copper this year, it said in August. It will release its third quarter production report on Oct. 18.

MMG, headquartered in Melbourne, posted a half-year profit of $17.8 million in August. (Reporting by Melanie Burton and Sonali Paul; Editing by Neil Fullick)